Lessons Learned From a Failed Ivy League Entrepreneur

A "Case Story" By Chris Cononico
 

Chapter Forty-One

“Nothing is permanent in this wicked world, not even our troubles.” – Charles Chaplin

Our attorney worked behind the scenes and his office contacted all 50 Attorneys General to arrange a conference call to discuss the situation. Although many Attorneys General hadn’t received any complaints about NCRB, he wanted to be proactive and get everyone together on the phone. He felt it was faster and less costly to clear things up with the entire group, rather than having to deal separately with up to 50 different parties.

At the peak of the storm, we were speaking with 35 different Attorneys General, which was more attention than Microsoft got for alleged monopolistic practices that year. Although most of these officials had not contacted us directly, our attorney wanted to resolve any potential issues about this matter that could possibly arise in the future.

As a result, he began speaking with the Attorneys General of the States of Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Vermont, Virginia, West Virginia, Washington, and Wisconsin.

Naturally, it benefited us as founders to have an agreement in place that said we had no legal problems, so we were extremely supportive of the idea. Our attorney accumulated detailed information about our operations as definitive proof that we offered real products and services. He had documentation supporting all of our discounts with national merchants, our VISA banking agreement, our arrangements with book wholesalers, and letters from our various suppliers detailing the steps we took to create our business.

Since we already offered full refunds to anyone that felt confused by our marketing, there were arguably no injured parties. Our attorney’s job was to be the voice of reason and remind the group that we were 22 year-old entrepreneurs. He argued that although we made some mistakes, we had good intentions. Besides, we had already taken steps to rectify our mistakes by offering refunds. He demonstrated that the whole situation was a mistake, not a scam.

Within weeks, we signed an agreement with the Consumer Fraud Division of the Federal Post Office. We were never charged with any wrong doing, nor did we ever have to attend any formal proceedings. We just walked into our attorney’s office one day and signed an agreement called a “voluntary agreement of compliance.” It laid out the allegations against us, stated that we completely denied any wrong doing, and that we agreed never to do anything the resembled those allegations in the future.

My partners and I also agreed to close our NCRB business, which had been the focal point of the controversy. Our NCRB mail was returned to sender by the post office that serviced our PO Box, so we never got to know how many responses we received from our direct mail campaign.

In retrospect, I give our attorney tremendous credit for managing the situation. The Attorneys General could have tried to make an example of my partners and me. The legal cost of defending ourselves would have probably driven our families into bankruptcy. By signing a voluntary agreement, we avoided a lot of potential problems.

By the time the press blackout was lifted by our attorney, newspapers didn’t care about us anymore. I suppose we could have ultimately issued a final press release, but there didn’t seem to be much of a point. Maybe we didn’t think anyone was listening, or maybe we felt disoriented by everything. Either way, we opted to lick our wounds out of the spotlight.

Unfortunately, we had more immediate problems, like repaying all of the debt we had accumulated. Our bruised egos took a backseat, as we had to focus on dismantling the company to which we had devoted the last 2+ years of our lives.
 

Copyright  2005 by Chris Cononico
All rights reserved. No part of this manuscript may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the author, except by a reviewer who may quote brief passages in a review.